Why do we spend beyond our means?

We are all manipulated to spend more at holiday times… Christmas holidays, birthdays and many other occasions throughout the year.  Men love the car, auto and machinery tool stores, while women love to shop for clothing, jewellery, shoes and furniture items.  Our family, neighbours or friends acquire a new car, boat, furniture, barbecue and it can make us envious and we think we should have one too. We live in an age when we like to have the latest and the best, but it comes at a cost.

You Need a Budget
Every Dollar Counts

In this article, we will show you some budget sheets that you can use as a simple budget planner. 

We live in a world where “shiny objects” are all around and we feel we just have to have them now, without much thought as to whether we need them or can afford them.  Retailers are out there everywhere, ready to take our money and offering all sorts or incentives to BUY their products.  Most people put items on the credit card or use after-pay systems and find themselves in financial difficulty when it comes to paying these things off.  Credit card debt has increased rapidly over the last 10 years as the banks have made it so much easier to borrow money and pay it off later.  However, for many people it is extremely difficult to pay it off.  

The retail stores generate a buying frenzy before the holiday season, during and then after, offering huge sale promotions.  We all need to realise the big department stores and retail chains price their product up heavily for the holiday times when demand is high and generally make good profits, then at the end of the season, reduce their prices to still create interest in their products, as they are wanting to clear their stock and their warehouses to allow space for the arrival of the new season’s stock, while still making money.  This of course is the time to buy if you have budgeted, and often more discount can be gained if you pay in cash.

you need a budget

Many women purchase clothing on impulse.  They don’t need it, they just WANT it and some buy without actually trying on the item of clothing in the store first, place it in their wardrobe, thinking they will wear it at a later date, then months later, realise it is too tight, too large or too small or simply unsuitable, or they just don’t like it.  (Younger women can easily fall into this trap, wanting the latest fashion fad, to impress their friends).  Consequently, the item stays in the wardrobe, cluttering up space or it is eventually donated to a charity store.  This is a bonus for those looking for a bargain.  

When you find your wardrobe is bulging or there are too many things cluttering up the house, garden or shed, its time to declutter and donate these items to charity to be recycled.  These items are generally sold for only a few dollars.  So, get creative, check out the charity stores as they generally receive huge quantities of unwanted items, new and used, but with a good wash or a fresh coat of paint they will serve your purpose.  You will often find an item of clothing with its original tag, that has never been worn.

I knew an older lady who had plenty of money, who would always looked smart and she said she always checked out the charity stores first on a regular basis and said she has saved thousands over the years.

How to make a Simple Budget

If you wish to save your money for more important things, it’s important to have a budget, an itemised list of your monthly expenses with category headings.  This is where you fill out and record all your income and spending and regular payments due on a weekly, monthly or yearly basis, so you can see that you will have enough money, not only to cover these payments and any unexpected bills, but to save for your future wealth and wellbeing.

Monthly Budget
Budgeting Worksheets

We need to educate ourselves and learn the skill of managing money wisely.  Sticking to a simple budget comes down to being disciplined and getting into the habit of routine record keeping, while putting money aside for holiday spending, school fees and contingencies such as an unexpected repair on the car or house.

Why does budgeting always seem so difficult?

Spending is all about feelings and emotions and making yourself feel good, but we need to use reverse psychology on ourselves and reward ourselves when we overcome the temptation to buy the impulse items, and we need to take the emotion out of the buying experience.


A lot of families just don’t talk about money and the importance of saving or budgeting.  We generally don’t talk about money to each other as it’s looked upon as being too nosy and prying into others’ financial affairs.  But children need to be educated about money.  This is the main reason for parents giving them pocket money.

What you need to make budgeting work…

1 First, you need to set goals… have a reason to budget.  You need good motivation and you need to be accountable… 

2 You need a parent, housemate, friend or partner to be accountable to.  They need to understand your aims and objectives and will be an encouragement, a support in trying to save money and eliminate unnecessary waste such as credit card interest and fees. They don’t need to know exactly where you stand financially, but they need to have your best interests at heart. 

3 You need forward thinking because the future is in your hands and your spending habits must change accordingly.  You will sleep well at night knowing that your finances are very much in control.

4 Most importantly, you need to KNOW ALL YOUR ESSENTIAL YEARLY RUNNING COSTS — Be very aware of what all your regular bills are….

  • Car costs… registration, regular maintenance and running costs and when they are due.
  • School fees for those with children.  Make allowances for uniforms, books, tuition fees and school activities.
  • Household running and maintenance costs. Check regularly as you may be entitled to a discount. If so, change suppliers if it works out cheaper and if no fees charged. Many people are not aware of the discounts that maybe available to them, saving lots of money each year, spent unnecessarily.  If you don’t ask or inquire you will never know.
  • Allow for garden, pool, lawn, gutter-cleaning costs
  • Allow in the budget for dental, medical and pet costs.

If you put enough aside, when payments are due, the money will be there, and an unforeseen bill won’t leave you out-of-pocket. 

3 Simple Steps to Creating a Simple Budget

Step 1

Budget Spreadsheet

The first thing to do is to total up your expected combined income for the coming year, from all income sources… wages, bank interest, share dividends etc.  Once you have your total figure, divide it into three categories… 

50% will be allocated to needs, essential expenditure such as food, shelter, energy, transport and loan repayments.

30% will be allocated to your wants… all those things that are nice to have but you could forego if you had to.  This might include entertainment and social outings.  You must take note of this figure because it will place a firm limit on your discretionary spending.

The remaining 20% of your income is to be set aside for your longer-term goals.  This might include travel, debt reduction or a buffer for unexpected events (such as a world-wide pandemic).  It will be very important that you do not spend this money.

This is known as the 50 30 20 Budget.  Some banks will assist you to create separate accounts, making it easier to deposit your income into the three separate categories.

Step 2

It’s important to know what your monthly expenses are. 

It will take time, but you must WORK OUT A WEEKLY, MONTHLY OR YEARLY BREAKDOWN OF EACH EXPENSE.  Your household expenses can be determined by calculating your average grocery bill over a month.

It will take self-discipline to make this work.  Get into the habit of recording each day’s expenditure the same day.  Here is a simple budget layout you can use for recording all weekly expenses.  This one is available in a pad form with tear-off sheets for each week.  At the end of the week you can enter the totals into a simple table.

Budget Planner

There is no need for fancy software.  You can do it with a calculator.  Make it a habit, like brushing your teeth.  Once you have done this for a whole month, you will be in a position to draw up your budget for the coming year.

List your annual, quarterly and monthly expenses.  Total up your expenses for the month and multiply by twelve.  Write these totals into a new Budget Planner sheet.  A simple Excel budget spreadsheet may help.  This will give you your targets for the year and you will know how much you can save from your yearly income.

Step 3  – Your End Goal

Now, the fun part is to decide what is the big important item that you want to save for, and you will know how long it will take.  It may be a holiday… start planning for it.  It may be a car… start researching it.  It may simply be clearing your debts… Start making extra payments off your loans. 

Every Dollar Counts
Know your end goal

Commit yourself to your goal. 

Agree on it with your partner.  Visualise it and stick a picture on your wall.  This will become your motivation to stick to your budget.  Continue to use your Budget Planner sheets to ensure that you remain on track.  This is where your accountability partner can help. 

At the end of the year, conduct an annual budget review as your income, expenses and goals may change.  You may be able to trim a little off your household expenses to improve your weekly budget.  The weekly grocery budget can vary but taking advantage of specials in the supermarket will greatly improve the average grocery bill.  These are simple budget measures that will become a habit as you watch your finances improve.

Now Take Action and Make it Happen!

If you would like to use your computer to help with your budgeting plan, there are some software tools available.  The most popular budgeting programme is called YNAB (You Need a Budget).  And the bottom line is that… You Need a Budget!       

You can find some tips for reducing your weekly expenses here.

Read more about Creating and Managing your Wealth

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